The New Multilateral Development Banks and the Future of Development: What Role for the UN?

United Nations University Centre for Policy Research November 2015

Dr. Adriana E. Abdenur Professor at the Institute of International Relations at PUC-Rio ([email protected])

Series Editors: Rahul Chandran and Hannah Cooper, UNU Centre for Policy Research

Introduction in development financing and norms-setting.

The field of international development coop- The Multipolarity Debates and the New Devel- eration is undergoing tectonic shifts, with new opment Banks nodes of decision-making and resources emerging alongside existing institutions. From the 1970s Debates about the changing configuration of the to the turn of the millennium, the Bretton Woods international system have become pervasive in Institutions, alongside the United Nations Devel- the field of international relations. Some observers opment System (UNDS) – the fifty-plus programs argue that the system is undergoing a transition and agencies within the organization that are pri- towards multipolarity,2 with new engines of eco- marily dedicated to international development nomic growth and influence arising alongside the – constituted the field’s loose center of gravity. more traditional global powers. There is sharp dis- Since the turn of the millennium, however, the agreement over whether the so-called “moment gamut of actors involved in international devel- of unipolarity” – the post-Cold War period during opment has diversified significantly, with private which the United States has enjoyed unprecedent- foundations, South-South cooperation providers, ed influence over international relations – existed and other stakeholders becoming more influential in the first place, and if so whether it has come to an – both quantitatively and qualitatively. This broad- end.3 However, in the developing world and espe- ening assortment of actors (and the development cially among a number of large developing coun- norms they espouse) creates new dilemmas for tries that have been classified as rising powers, the UNDS.1 Broadly put, what should be the UN’s the perception of an ongoing structural change in role within the shifting panorama of international the international order is widespread among po- development? litical elites. In 2009, for instance, Brazilian Pres- ident Luiz Inácio Lula da Silva titled his opening This paper focuses on one piece of this changing speech at the UN General Assembly “The Multi- puzzle: the emergence of new multilateral devel- polar World and the Revitalization of the United opment banks and their role within the field of Nations.”4 In 2013, his Russian counterpart, Pres- international development, including the implica- ident Vladimir Putin, openly stated that “BRICS is tions for the United Nations. More specifically, the a key element of the emerging multipolar world.”5 paper concentrates on two recently established These rising powers – broadly put, countries that institutions, one primarily regional and the other exert a considerable degree of influence within essentially transregional: the Asian Infrastructure their respective regions, and whose leaderships Investment Bank (AIIB) and the BRICS’ New De- nurture broader ambitions at a global level – per- velopment Bank (NDB). Examining these two na- ceive new windows of opportunity appearing for scent organizations against the backdrop of some expanded influence in world affairs. As a result, of the field’s key debates, including the changing they increasingly pool their voices and resources role that geopolitics plays in international devel- in pressing for a more representative global gov- opment politics, I argue that the UN must be pro- ernance system – one that would not only better active in redefining its role vis-à-vis the dynamic reflect the current distribution of power, but that network of institutions being created by so-called would also expand those states’ own influence on rising powers. The key point is this: in order to the international stage. maintain its relevance in the field, the United Na- tions must harness its convening power and boost Perhaps in no sphere of international relations is its legitimacy as agenda-setter, so as to foster a the shift towards multipolarity more evident than clearer division of labor with development financ- in international development.6 Not only have the ing institutions, particularly in light of the 2030 traditional actors and sources of development Agenda for Sustainable Development. funding diversified, discussions about the norms of development are also taking place in a variety The paper is structured in the following manner: of settings, from the highly formalized and north- The first section provides a brief overview of the ern-led Organization for Economic Cooperation AIIB and the NDB, focusing on their decision-mak- and Development (OECD) to the looser and more ing structures and stated goals. The following sec- recently formed BRICS (Brazil, Russia, India, China, tion considers their potential impact on the field of and South Africa) coalition. Some of these debates international development. Finally, the conclusion have generated widespread attention, as well as a looks at the broader implications of these changes certain level of alarm among Northern institutions, for the UN itself, proposing a reframing of its role because some of the norms promoted by orga- in light of the diversifying gamut of actors involved nizations like the OECD Development Assistance The New Multilateral Development Banks and the Future of Development: What Role for the UN? 3

Committee (DAC) are being openly contested by infrastructure financing in the developing world – the providers of South-South cooperation, as well gained momentum: the AIIB and the NDB. as non-state actors (both within the Global South and within DAC countries). These innovations offer new opportunities, for instance by contributing towards the diversification These providers tend to stress principles such of funding sources for large-scale projects. At the as horizontality (part of a claim that South-South same time, they create new challenges for estab- cooperation is unburdened by the legacy of co- lished institutions, including regional banks and lonialism), mutual benefit, and – perhaps most global organizations. Even as these institutions controversially – the non-imposition of political engage in “business as usual,” focusing on mar- conditionalities on development projects. This ket rates, they exist within political arrangements stance reflects a deep skepticism on the part of (such as the wider BRICS grouping) that promote South-South cooperation providers of the good openly contestatory discourses, which suggests governance paradigm in which improvements to that at least part of their initiatives will be motivat- social policy, in particular, are offered in exchange ed by politics – including geopolitics. In addition, for reforms in the political and economic spheres. the individual members have adopted definitions Instead of demanding cross-sectoral reforms, of development cooperation that sometimes con- Southern partners tend to stress the importance tradict those promoted by the OECD-DAC, for of national sovereignty, claiming that their devel- instance through the endorsement (especially but opment cooperation programs are undertaken not exclusively by China) of trade and investment with no strings attached except for, in most cas- as key components of development cooperation. es, economic guarantees (e.g. collateral or other protection against borrower default) that are proj- These new actors, and the norms they may pro- ect-specific. As a result of their refusal to impose mote, are provoking new existential questions on governance requirements or other political or the part of their more established counterparts. cross-sector conditionality, South-South coopera- In the case of the United Nations, which contains tion providers claim that their initiatives are more a vast gamut of agencies dedicated to develop- respectful of the sovereignty of partner states. ment, the creation of these banks poses the ques- tion of what, if any, role the UN should play with Until recently, the emboldened role of South- respect to these new institutions. South cooperation providers appeared predom- inantly through bilateral channels. China, for The Asian Infrastructure Investment Bank instance, vastly increased its cooperation with individual African states; even though it established The Chinese government proposed the creation the Forum on China-Africa Cooperation (FOCAC), of the AIIB in October 2014. The initiative initially this platform has functioned more as an umbrel- attracted widespread attention largely due to the la mechanism for coordinating its bilateral ties political wrangling over its founding; the United in Africa than a truly multilateral initiative. And, States government reportedly pressured key al- although China has been by far the most visible lies not to join the China-led institution, while the player among self-designated South-South coop- Chinese media called the final count of founding eration providers, other rising powers – including members – 57, including non-Asian states like the not only the BRICS, but other regionally important United Kingdom – nothing short of a “diplomatic countries like Turkey and Indonesia – have also ex- triumph.”7 The bank’s Articles of Agreement were panded their roles in international development, signed in June 2015,8 with the stated mission of even beyond their immediate vicinities. helping to close the finance gap for infrastructure in Asia and to enhance cooperation among mem- Over the past two years, however, the salience of ber states. Critics, however, have interpreted the South-South cooperation has grown not only due creation of the bank as a move by Beijing to ex- to these individual actors, but also because of pand its own influence in international develop- new multilateral initiatives. Aside from launching ment and geopolitics underneath a thin veneer of loose groupings such as the BRICS, the India-Bra- multilateralism.9 zil-South Africa (IBSA) Dialogue Forum, and the Shanghai Cooperation Organisation (SCO), rising Reactions to the initiative have varied widely, both powers have increasingly moved towards the es- within Asia and outside of it. The UN’s official re- tablishment of new institutions. In 2015, two of sponse has been that the AIIB, along with the NDB, these emergent organizations – both geared to- “present potential for scaling up financing for wards helping to reduce the enormous deficit of sustainable development,” but it also notes that The New Multilateral Development Banks and the Future of Development: What Role for the UN? 4

these institutions “will take time to develop their not be limited to companies of member states. In institutional framework and operational modal- addition to undermining the argument that the ities.”10 The leaders of established development AIIB is a narrowly self-servicing initiative by China banks – including Christine Lagarde of the Interna- under the guise of good-natured multilateralism, tional Monetary Fund (IMF) and Jim Yong Kim of this setup may be geared at improving the insti- the World Bank – have stated that they are eager tution’s efficiency and speeding up its implemen- to cooperate with the new institution. Nonethe- tation. less, the AIIB has clearly created ripples within a pond long dominated by the Bretton Woods Insti- While AIIB membership is widely dispersed, the tutions. In March 2015, for instance, Foreign Policy core of the group is a handful of Asian countries. ran an opinion piece titled “The AIIB is a Threat Moreover, around three quarters of the bank’s ini- to Global Economic Governance.”11 In contrast, tial capital is being provided by regional members. many stakeholders in the developing world have Although the Articles of Agreement specify that welcomed the initiative, noting that the infrastruc- the bank will rely strictly on economic criteria in ture finance gap has only widened with time.12 granting loans and other forms of assistance, it is possible that geopolitical interests may influence On the whole, the bank’s emerging architecture the institution’s willingness and/or ability to pro- seems conservative, in that it largely replicates vide loans to countries whose relations with Bei- governance mechanisms tested elsewhere (in- jing become tense.14 For instance, in order for the cluding at the World Bank itself). Yet there are also Articles to enter into force and the AIIB to become important divergences from established develop- operational, at least 10 signatories, with capital ment finance institutions. With respect to gover- subscription of at least 50% of the total authorized, nance, the issue of Chinese hegemony is not as must have ratified or formally approved the agree- clear-cut as some critics have suggested; rather ment. In addition to China, these initial signatories than securing veto power (something the United are likely to include two other countries that also States effectively holds in both the IMF and the belong to the BRICS grouping: India and Russia. World Bank, with voting shares of 17.69% and These latter stand to become the AIIB’s second 15.85%, respectively), China’s shares in the AIIB and third largest shareholders, respectively. This will be diluted as the membership expands. On composition creates considerable overlap with yet the other hand, the location of the bank’s head- another institution currently awaiting implementa- quarters in Beijing, as well as reports that Beijing tion, and also heavily backed by China: the NDB. will promote the use of the yuan as a key currency, suggest that Chinese influence over the institution The BRICS’ New Development Bank may take shape through other channels. Regard- less of whether this drive is aimed at making the Much like the AIIB, the NDB – formed in July 2015 – Chinese currency into an alternative to the US was designed with the intent to inject much-need- dollar as the anchor of the global economy, as ed capital into infrastructure projects in the devel- some observers have argued,13 the AIIB’s greater oping world. However, the NDB lacks a regional willingness to carry out transactions in currencies focus and has been a transregional initiative since other than the dollar should make it attractive to a its inception, with five founding members from wide variety of borrowers, especially low-income four different continents. This is not to say that countries in need of an infrastructure boost, or the bank will lack certain regional priorities; start- medium-sized economies struggling with curren- ing with the Fifth BRICS Summit in Durban, each cy conversion problems. At the same time, the US meeting has been accompanied by parallel or in- response to UK membership seems to have been tersecting get-togethers at the regional level (in overblown; if anything, the inclusion of advanced South Africa in 2014, President Jacob Zuma invit- economies, particularly the donors of the OECD- ed leaders from the African Union states; in Brazil DAC, among AIIB founding members should help in 2014, President Dilma Rousseff convened those alleviate US concerns, as they may be more vo- of the Union of South American Nations (UNA- cal about environmental impacts, labor condi- SUR); and in Russia in 2015, President Vladimir Pu- tions, and other principles and norms enshrined in tin brought together leaderships from the SCO). OECD-dominated multilateral processes. These efforts to create intersections between the BRICS coalition and key regional organizations As for operations, the bank’s initial provisions in- may be formally or informally reflected in the NDB clude an open procurement policy, according to agenda, for instance through the inclusion of Afri- which goods and services used in AIIB projects will can development among the institution’s top pri- The New Multilateral Development Banks and the Future of Development: What Role for the UN? 5

orities as a result of Zuma’s initiative. ensure that they remain the primary decision-mak- ers (as BRICS capital share cannot fall under 55% The five founding states have accumulated, to dif- of the total). As with the AIIB, the issue of poten- ferent degrees, considerable portfolios of South- tial Chinese dominance has been debated with South development cooperation through bilater- respect to the NDB’s design, especially given the al channels, and all of them nurture regional as relative size of China’s financial power, the grow- well as global ambitions. None of these states ing relevance of the yuan, and the successful ne- are members of the OECD DAC, although some gotiations by Chinese diplomats to establish the – especially China and Brazil – interact with differ- bank’s headquarters in Shanghai.17 Within the ent divisions of the OECD on an informal basis. new institution, however, China’s influence is di- On development norms, the BRICS states have luted through a decision-making structure that is maintained their distance from DAC-led efforts relatively horizontal, with the five founding states to launch a Global Partnership for Development, holding an equal number of shares and equal vot- arguing that the organization lacks the legitima- ing rights, and none holding veto power. Over cy necessary to launch a truly global effort that, time, the provision that each member can only in- among other things, takes seriously the preferenc- crease its share of capital with the approval of the es of South-South cooperation providers.15 other five founding members should also serve to curb Chinese dominance. Working through the loose BRICS coalition, since the mid-2000s these five states have amplified The bank’s clientele is still being decided upon, their calls for a more representative global gov- but the establishment of the African headquar- ernance architecture, especially within the field ters in South Africa as part of the initial negotia- of international development. The declarations tions signals a strong commitment among the five and plans of action issued at the conclusion of the founding states to maintain African development annual BRICS summits have often incorporated among the institution’s top priorities. It is clear, openly contestatory language, for instance ques- however, that one of the primary purposes of the tioning the legitimacy of institutions – such as the NDB – aside from providing financing for infra- IMF and the World Bank – whose decision-mak- structure projects to other developing countries – ing processes date back to the immediate post- is to boost development cooperation among the World War II period.16 Thus, through the creation BRICS themselves. of the NDB, the BRICS are intensifying their pres- sure for reform of the Bretton Woods Institutions The Role of the UN even as they launch new mechanisms that, for all intents and purposes, will compete with those in- Far from emerging within a vacuum, these multi- stitutions in at least some instances. While the AIIB lateral banks are part of a broader trend toward and NDB do not represent revolutions within the the decentralization of financing and other as- field of development banks, in that they replicate pects of development cooperation. They seem to many of the structures, decision-making process, be long-term projects rather than short-term stop- and even personnel of pre-existing institutions gap measures, and the United Nations must adapt such as the World Bank and the IMF, they appear accordingly if it is to maintain or expand its own within a geopolitical context that is radically differ- relevance as a coordinating mechanism as well ent from that of the post-World War II period, and as a resource in development. To do so, a clearer one in which rising powers find greater leeway for division of labor must be achieved, much in the promoting their particular views of development. mold of what is happening in the field of inter- Ideas about the role of the state as a catalyst and national security, in which regional organizations orchestrator of development, and about the links like the African Union (AU) have emerged that act between trade and technical cooperation, are un- under the tacit umbrella of the United Nations, likely to replicate the predominant worldviews of both operatively and normatively. While this re- the Bretton Woods Institutions, or even of the UN lationship is not devoid of contradictions, it can itself. be used as inspiration for an analogous arrangement in international development: one in which Although the NDB’s foundational documents indi- regional and transregional organizations develop cate that the bank will be open to broader mem- geographic as well as sectoral niches for which bership by states and other multilateral organiza- the United Nations provides effective coordina- tions, the BRICS states have in effect locked in an tion mechanisms. Such an arrangement, however, amount of power over the institution that will help will not emerge spontaneously; rather, it depends The New Multilateral Development Banks and the Future of Development: What Role for the UN? 6

on the linkage of these new organizations to the ists alongside North-South aid, rather than replac- UN Development System, preferably one in which ing it altogether. The persistence of the traditional existing arrangements within the Economic and multilateral finance organizations, both regional Social Council (ECOSOC) are strengthened and and global, attests to the layering of new institu- rendered effective conveners of a wider variety of tions onto older arrangements rather than the out- development actors. right replacement of defunct initiatives by novel ones. The same can be said of bilateral aid and Should the UN be maintaining or trying to expand cooperation. While, over the past decade, many its relevance as a coordinating mechanism? The donors have either reduced or restructured their answer arises out of functional necessity: however provision of development assistance (for instance, flawed the UN may be, including in international so as to better align their aid programs with their development, it is the only body that is capable economic cooperation objectives), others have in of taking on such a role. With discussions of how fact expanded their assistance.19 The continued to finance and implement the 2030 Agenda well importance of aid is also reflected in OECD aggre- underway, it is clear that member states, as well as gate statistics. The dip in DAC aid following the the organization in its own right, have not aban- 2008 onset of the global financial crisis was note- doned aspirations of a more effective coordination worthy, but since then, flows from donor states role. The reconfiguration of the field calls for such have recovered; in 2013, although assistance to a coordinating platform – but not for the reasons the poorest countries continued to fall, overall aid usually cited (namely, the rise of a menacing China to developing countries rebounded to reach an and the decline of a supposedly well-ordered field all-time high.20 Predictions and announcements of into a dangerously unstructured hodgepodge of the “end of aid” have thus proven premature. The donor agencies and multilateral initiatives). field of international development must adapt to the expansion of South-South cooperation, but it The field of international development is neither has not been overtaken by it. anarchic nor imperiled by a hostile rising super- power. Those concerned with the creation of in- Given this scenario, in which South-South coop- stitutions like the AIIB and the NDB have often eration providers and new institutions are layered pointed to a “fragmented governance system.”18 onto (and intertwined with) traditional donors and However, fragmentation is not the most accurate institutions, the United Nations remains the only way to portray the emergence of these institutions. platform with the legitimacy to coordinate efforts In addition to connoting the lack of an organiza- towards global targets and goals. The inclusive- tional principle, the notion of a fragmented system ness of its membership makes it a more appro- presumes that key actors involved in the creation priate arena than organizations like the OECD, of these new banks stand diametrically opposed which is often viewed as a “rich countries’ club.” to established norms of international develop- Although the United States and its Western allies ment. While leading players, including China, are powerful players within the UN Development have often opposed attempts by the OECD-DAC System, the lack of a central mechanism that locks to establish the norms of the field, this assumption in their power, as in the case of the UN Security in fact exaggerates the contestatory nature of the Council on matters of peace and security, means new development banks. That their founding doc- that developing countries may find greater room uments make provisions for cooperation with the for maneuver. The UN, despite its flaws, is not Bretton Woods Institutions attests to the willing- a mechanism of cooption. One would be hard ness to work within the existing system (even as pressed to think of another space where South- those states work to change it) rather than a desire South cooperation providers may be convinced, to upend it entirely. for instance, to invest in social infrastructure and other development sectors rather than on physical In addition, this view tends to minimize (if not ig- infrastructure alone – or, conversely, where donors nore altogether) the current and potential role of could be persuaded to broaden the scope of their the United Nations, not only as a mechanism for own definitions of aid so as to include, or at least the provision of development assistance, but also rethink, the role of trade and investment. Hammer- in coordinating the broadening gamut of actors ing out thornier issues, such as the desirability and involved. effectiveness of imposing political conditionalities on international development initiatives, would be Moreover, while the surge in South-South devel- no easy task regardless of platform, but at the mo- opment cooperation has been considerable, it ex- ment there are no primary arenas other than the The New Multilateral Development Banks and the Future of Development: What Role for the UN? 7

United Nations in which these divergences could and Mexico – must also work in the direction of be plausibly discussed on equal footing. For this to making the UN into an agile body able to convene happen, however, developing countries must be – a wide variety of actors (state and non-state alike) from the start – a part of the process of framing into action. and shaping of discussions, rather than be invited to debates whose basic terms have been pre-set In addition, improved coordination will depend on by donor states under the guise of multilateralism. the ability of the UN itself, insofar as the organization is more than the sum of its parts, to pro- Operationally, this requires another style of ac- actively engage with the emerging organizations. commodation and responsiveness on the part of Recent discussions of global development norms, the United Nations. Rather than fragmentation, such as those undertaken through the DAC-led we may imagine the new regional and transre- Global Partnership, have essentially weakened the gional banks as being nested – both operationally function of bodies like ECOSOC and the Devel- and normatively – within a broader framework un- opment Cooperation Forum, which – by virtue of der the loose aegis of the United Nations. Such an their broader memberships – are far more legiti- arrangement would resemble the emerging archi- mate arenas for coordination in the eyes of non- tecture in international security, where the rise of OECD members, including the BRICS states. The regional players more deeply engaged with their ambitious framework of the SDGs requires, if not geopolitical environs has prompted a renegotia- centralized decision-making, at least a more in- tion of the global division of labor over security clusive arena where priorities can be determined, issues. UN peacekeeping, for instance, has been modalities defined, and norms debated. increasingly supplemented with regional efforts, such as those led by the African Union. While this arrangement is far from seamless21 – sometimes regional organizations operate on norms other than those promoted by the UN, particularly when UN norms are excessively vague – it offers a template for rethinking about how the field of development may be reorganized. Instead of feel- ing threatened by the emergence of new hubs of capacity and of normative debates, the UN – like other established institutions in the field of development – must help to bring those discussions into the mainstream.

Part of the challenge is to boost the effectiveness of the UN as coordinating body. The task requires, first of all, that rising leaderships such as China invest in the political capacity of the organization’s development system. This will require, among other things, working with states that have tradi- tionally been highly resistant to certain deep reforms at the UN, including the United States and Russia. Despite its tensions with the US on security issues, on international development China – an increasingly important multilateral player – is well-poised to either offer or back up proposals for change. At the same time, the deepening ties between Beijing and Moscow may prove valuable in catalyzing change in the way that the UN par- ticipates in international development. The effort, however, does not depend only on China. A wide range of developing countries – from emerging powers like the IBSA states, Turkey, Indonesia, and Nigeria, to countries that have nurtured closer ties to the United States in recent years, like Colombia The New Multilateral Development Banks and the Future of Development: What Role for the UN? 8

Endnotes

1 See Thomas G. Weiss (2012) What’s Wrong with the United Nations and How to Fix It (Polity Press: London). 2 For an overview of the debate until the turn of the millennium, see Sean Lynn-Jones (2008) Preface to Primacy and Its Discontents: American Power and International Stability (The MIT Press: Cambridge, MA). For more recent discussions, see Richard N. Haass (May–June 2008) “The Age of Nonpolarity”, Council on Foreign Relations and Zaki Laidi (2014) “Towards a post-hegemonic world: The multipolar threat to the multilateral order”, International Politics 51, 350-365. 3 Amitav Acharya (2014) The End of the American World Order (Polity: London). 4 Luiz Ináci Lula da Silva (2009) “O mundo multipolar e a revitalizacão da ONU”, Opening Speech at the UN General Assembly, October 9. 5 http://thebricspost.com/brics-key-to-multipolar-world-putin/#.VjYiAqLTPos 6 In the realm of international security, a shift towards multipolarity is less evident; despite the expansion of Chinese military power, the Unit- ed States still far outpaces it and other states in most categories of military power. At the multilateral level, recent efforts to reform the UN Security Council have failed to expand membership or significantly alter its procedures. 7 Yelin Hong (2015) “The AIIB Is Seen Very Differently in the US, Europe, and China”, The BRICS Post, 8 May, available at http://thediplomat.com/2015/05/the-aiib-is-seen-very-differently-in-the-us-europe-and-china/ 8 Asian Infrastructure Investment Bank (2015) “Articles of Agreement”, Singapore, 22 March 2015. 9 Adriana E. Abdenur (2015) “China and the BRICS New Development Bank: Legitimacy and Multilateralism in South-South Cooperation”, IDS Bulletin Volume 45, Issue 4, pp. 85–101. 10 United Nations (2015) World Economic Situation and Prospectus 2015 (United Nations: New York). 11 Paola Subacchi (2015) “The AIIB is a threat to global economic governance”, Foreign Policy, 31 March. 12 See, for instance: African Development Bank Group (2015) “President Kaberuka lauds creation of the Asian Infrastructure Investment Bank”, available at http://www.afdb.org/en/news-and-events/article/president-kaberuka-lauds-creation-of-the-asian-infrastructure-investment-bank-14542/ 13 Frank Holmes, for instance, wrote in Forbes that “China’s move demonstrates its ongoing efforts to establish the yuan as a global reserve currency on par with the U.S. dollar It’s no secret the country wants the yuan to become part of the IMF’s Special Drawing Right (DSR), a composite currency unit that now consists of the dollar, Japanese yen, British pound sterling and euro. The founding of the AIIB might very well bring the country closer to realizing these goals.” Frank Holmes (2015) “China Challenges Dollar Hegemony with New Infrastructure Bank” Forbes, 6 April, available at http://www.forbes.com/sites/greatspeculations/2015/04/06/chinas-infrastructure-bank-challenges-dol- lars-world-hegemony/ 14 Biswas (2015) identifies the ability to lend with autonomy from political influences as one of the new banks’ main challenges ahead. See Rajiv Biswas (2015) “Reshaping the Financial Architecture for Development Finance: The new development banks”, LSE Working Paper No. 2/2015, available at http://eprints.lse.ac.uk/61120/1/LSE%20GSU%20Working%20Paper%202-2015.pdf 15 See, for instance, The BRICS Post (2014) “China, India opt out of OECD-backed meet,” 17 April, available at http://thebricspost.com/china- india-opt-out-of-oecd-backed-meet/#.VjdMHKLTPsE. 16 The Joint Statement issued at the end of the first BRICS Summit, held in 2010 in Brasília, mentioned reform of established economic and financial institutions as one of the coalition’s key goals: “We will strive to achieve an ambitious conclusion to the ongoing and long overdue reforms of the Bretton Woods institutions. The IMF and the World Bank urgently need to address their legitimacy deficits. Reforming these institutions’ governance structures requires first and foremost a substantial shift in voting power in favor of emerging market economies and developing countries to bring their participation in decision making in line with their relative weight in the world economy. We call for the voting power reform of the World Bank to be fulfilled in the upcoming Spring Meetings, and expect the quota reform of the IMF to be concluded by the G-20 Summit in November this year. We do also agree on the need for an open and merit based selection method, irre- spective of nationality, for the heading positions of the IMF and the World Bank. Moreover, staff of these institutions needs to better reflect the diversity of their membership. There is a special need to increase participation of developing countries. The international community must deliver a result worthy of the expectations we all share for these institutions within the agreed timeframe or run the risk of seeing them fade into obsolescence.” Item 11 in the Joint Declaration of the 1st BRICS Summit, Brasília, 16 April 2010, available at http://brics5. co.za/about-brics/summit-declaration/second-summit/ 17 Adriana E Abdenur and Maiara Folly (2015) “The New Development Bank and the Institutionalization of the BRICS”, Revolutions, 3:1, 66-95. 18 Subacchi (2015) “The AIIB is a threat to global economic governance”, op cit. 19 According to OECD statistics, in 2014 overall DAC flows stabilized after hitting an all-time high in 2013 (however, aid to the poorest countries continued to fall in 2014). Finland, Germany, Sweden, and Switzerland reported the largest rises in net ODA (nine other countries experienced smaller rises), while fifteen other DAC members reported decreases in aid flows. The sharpest declines were in Australia, Canada, France, Japan, Poland, Portugal, and Spain. See OECD (2015) “Development aid stable in 2014 but flows to poorest countries still falling”, 8 April (OECD: Paris), available at http://www.oecd.org/dac/stats/development-aid-stable-in-2014-but-flows-to-poorest-countries- still-falling.htm 20 OECD (2014) “Aid to developing countries rebounds in 2013 to reach an all-time high”, 8 April (OECD: Paris). 21 See, for instance, Amitav Acharya on norms subsidiarity: (2011) “Norm Subsidiarity and Regional Orders: Sovereignty, Regionalism, and Rule-Making in the Third World”, International Studies Quarterly, 55:1, pp. 95–123.